“Everything we do is aimed at leveraging our ecommerce ecosystem towards transactions to generate better value for sellers and buyers.”
Caio Ribeiro, senior director of classifieds for Latin America at MercadoLibre, thinks other businesses can learn from his company’s experience of introducing transactional capability to auto sites, as well as less common examples from the services category.
He will be speaking at AIM Group’s new MarketplacesBuzz conference (upcoming in Sao Paolo, Nov. 6-7) about the challenge the whole industry faces in shifting from pure classified to transactions.
The AIM Group spoke with Ribeiro about his presentation ahead of the conference:
How did you introduce transactions to MercadoLibre?
We previously introduced a product that allows a down payment on our auto vertical to reserve and make a down payment from say $200 – $500.
We started the reservation system in autos in three countries, Mexico, Brazil and Argentina and the learnings we gathered helped inform future launches, including those in services.
Six months ago we started a trial of transactional services in Argentina. It’s a completely different approach in a different category. In autos you have a limited range of products, in services it’s infinite.
We do this by using and leveraging our ecosystem. Everything we do is aimed at leveraging our ecommerce ecosystem towards transactionality to generate better value for sellers and buyers.
My presentation will outline this approach, including data from both verticals, with a LatAm perspective.
How has your finance system evolved?
One of the key components is finance. Our credit system, Mercado Créditos, is two years old. It started in our core ecommerce business, firstly for sellers and more recently for buyers.
We are working now on understanding how to loan money for ecommerce products.
Consumers can reserve cars using Mercado Créditos if they have pre-approval. It works in a transactional way, linked to other steps consumers take. The next thing is how to develop this product further.
The seller receives the money only when a buyer tells us they have received a car. We add security to help improve trust and transparency.
It’s important because in LatAm reputation for both real estate and autos is a work in progress. It also takes time to build sellers reputations because of the infrequency of car and property transactions.
Sellers see the importance of this, they want to get a good reputation and in the long run having that reputation will pay off for them.
How have you moved from classifieds to transactions?
We can share important lessons here because of our size in the market. We have transacted 275,000 loan credit applications, worth around $125m – just in 2019 Q2. We operate in 18 countries in LatAm and have over 70m users buying on our platform. This gives us a great perspective on what works and what doesn’t work.
This circle of trust is very important. This gives us an opportunity to try things. For instance, we work closely on price comparison because when buying a car we must show consumers they are paying the best online price.
A good reputation is vital but you can’t fabricate one. It doesn’t work like that, you have to build it.
There is no one specific way but we can make a difference with the products we have launched. I can’t give specific details but trust and transparency underpin our approach and we want to work out how to finance the whole car and integrate into the transactional cycle ecosystem.
Different credit conditions exist in different countries, Brazil is the biggest market in LatAm so we will look to develop further there.
We want to understand this whole situation. We are working with banks and want our platform to become a one-stop-shop. We may not do it all ourselves. We may use partners too.
We want to develop a different approach. We have a network of stores to help sellers and consumers have a provider for the best deal in the area. This could apply to any category.
What are the challenges you face introducing services to a transactional model?
“With services there are so many different categories, our approach would be to look at different options and see which would be the best fit for our models and systems. You must also consider consumers and sellers experience on a platform.
“How sellers use platforms in services is complex but we have some good experiences and research in that area.”
Caio Ribeiro is the first in a series of interviews with speakers at the MarketplacesBuzz conference in Sao Paulo on Nov. 6-7. Ribeiro is the senior director of classifieds for Latin America at MercadoLibre, a classified and e-commerce site operating in 18 countries across Latin America.